Question: Using the data in Figure 2.3, (a) Compute the average income of U.S. households. (b) If all incomes were equalized by government taxes and transfer

Using the data in Figure 2.3,

(a) Compute the average income of U.S. households.

(b) If all incomes were equalized by government taxes and transfer payments, how much would the average household in each income quintile gain (via transfers) or lose (via taxes)?

(i) Highest fifth

(ii) Second fifth

(iii) Third fifth

(iv) Fourth fifth

(v) Lowest fifth

(c) What is the implied tax rate (i.e., tax ÷ average income) on the highest quintile?

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